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The Pharmaceutical Journal
Vol 270 No 7240 p360
15 March 2003

Related websites
Alliance UniChem (more)
GEHE (www.gehe.de)

European wholesalers see strong retail growth

Wholesalers are reporting increased profits as their pharmacy chains reach critical mass

Both Alliance UniChem and GEHE have reported large increases in operating profits for their retail pharmacy divisions in Europe. In both cases growth has come from the increasing size of their pharmacy chains outside the United Kingdom.

Alliance UniChem reports that, in 2002, for the first time the majority of its pharmacy acquisitions had been in mainland Europe rather than the UK.

Jeff Harris, executive chairman of Alliance UniChem, told The Journal that as a result of uncertainty hanging over the UK community market while the outcome of the Office of Fair Trading report was awaited, acquisitions for its Moss Pharmacy chain had been restricted in the main to health centre pharmacies. "We shall be back in the market at some stage," he added. The company now has 1,021 pharmacies, of which around 780 are in the UK.

Alliance UniChem reported a 35 per cent increase in retail sales in Europe, with operating profits of £65m in 2002. Turnover at Moss was £715m. Turnover at UK wholesaling division UniChem was £1.92bn and was affected by GlaxoSmithKline's decision to transfer the former SmithKline Beecham products into its agency scheme.

Similar trends were reported by GEHE. Retail director Michael Ward said that the company had achieved a critical mass of pharmacies in a number of European countries and these are now making a contribution to company profits after allowing for the costs of acquisitions. The company now has 1,847 pharmacies, the majority of which are in the UK. Sales at the company's UK retail chain Lloydspharmacy rose by 10.3 per cent to €1.83bn (£1.14bn) and sales at its UK wholesaling arm AAH Pharmaceuticals were up 3.3 per cent at €3.2bn.

GEHE AG is to change the name of its main holding company to Celesio AG. Individual country names, such as Lloyds and AAH, will continue to be used locally.